Washington, Feb 20 (.) The United States and Indonesia have finalised a sweeping reciprocal trade agreement that will eliminate tariffs on more than 99% of U.S. products exported to the Southeast Asian nation, the White House said on Friday, in a move aimed at narrowing Washington’s $23.7 billion goods trade deficit with Jakarta.
President Donald Trump and Indonesian President Prabowo Subianto signed a document confirming their commitment to implement the deal, described by the administration as a landmark pact expanding access to Indonesia’s market of over 280 million people.
“President Trump is unlocking Indonesia’s market of over 280 million people to create commercially meaningful opportunities for American farmers and manufacturers,” Ambassador Greer said in a statement following Trump’s announcement of the Agreement on Reciprocal Trade with Indonesia. “This landmark Agreement breaks down trade barriers while advancing the economic and national security interests of the American people. I am glad to sign this historic Agreement with Indonesia and I thank Indonesian Minister Airlangga Hartarto for his commitment to rebalancing our trade relationship. I look forward to close coordination and engagement with Indonesia on implementation of these high standard commitments,” Greer added.
Under the agreement, Indonesia will eliminate tariff barriers on over 99% of U.S. goods across sectors including agriculture, health products, seafood, information and communications technology, automotive products and chemicals. Jakarta also committed to address a range of non-tariff barriers, including exempting US firms and originating goods from local content requirements, accepting US federal motor vehicle safety and emissions standards, and recognizing U.S. Food and Drug Administration standards for medical devices and pharmaceuticals.
It will remove certain certification and labeling requirements, eliminate pre-shipment inspections and take steps to resolve longstanding intellectual property concerns. Indonesia further pledged to ease restrictions on US agricultural exports by exempting food and farm goods from import licensing regimes and ensuring transparency in geographical indications covering products such as meats and cheeses.
On digital trade, Indonesia committed to eliminating existing tariff lines on so-called “intangible products,” supporting a permanent moratorium at the World Trade Organization on customs duties for electronic transmissions, and ensuring a level playing field for U.S. electronic payment service providers.
The two countries will cooperate on strengthening supply chain resilience, addressing duty evasion and ensuring export controls and investment security. Indonesia will also remove export restrictions on industrial commodities shipped to the United States, including critical minerals. As part of the agreement, Indonesia committed to join the Global Forum on Steel Excess Capacity and take action to address global overcapacity in the steel sector.
The White House said the pact includes roughly $33 billion in commercial deals and investments in U.S. agriculture, aerospace and energy.
These include about $15 billion in purchases of U.S. energy commodities, $13.5 billion in commercial aircraft and aviation-related goods and services – including from Boeing – and more than $4.5 billion in U.S. agricultural products. Freeport-McMoRan signed a memorandum of understanding with Indonesia to extend its mining license and expand operations in the Grasberg minerals district, the world’s second-largest copper mine. The administration said the deal could generate an estimated $10 billion in annual revenue and bolster U.S. critical mineral supply chains.
The United States will maintain a 19% reciprocal tariff rate on imports from Indonesia, with certain identified products eligible for a 0% rate. Washington also committed to establish a mechanism allowing specified volumes of Indonesian textile and apparel goods to receive a 0% reciprocal tariff rate, tied to exports of textiles produced from U.S. cotton and man-made fiber inputs.
The White House said the United States may take the agreement into account in future trade actions under Section 232 of the Trade Expansion Act of 1962, which governs measures taken on national security grounds. The United States ran its 15th-largest goods trade deficit with Indonesia in 2025, totaling $23.7 billion. Before the deal, Indonesia’s simple average applied tariff was 8%, compared with 3.3% for the United States.
The administration said both countries would undertake domestic procedures in the coming weeks to bring the agreement into effect. Trump has framed the deal as part of a broader effort to address what he calls unfair trade practices and persistent trade imbalances. In April 2025, he declared a national emergency in response to the U.S. goods trade deficit, citing a lack of reciprocity and non-tariff barriers in bilateral trade relationships.. .